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Chapter 02
Strategy and Sustainability
True / False Questions
1. An operations and supply chain strategy must be integrated with the organization's corporate
strategy.
True False
2. One of the competitive dimensions that form the competitive position of a company when
planning their strategies is cost.
True False
3. One of the competitive dimensions that form the competitive position of a company when
planning their strategies is delivery speed.
True False
4. One of the competitive dimensions that form the competitive position of a company when
planning their strategies is making the best trade-off.
True False
5. The process when a company seeks to match the benefits of a successful position while
maintaining its existing position by adding new features, services, and technologies into its
current portfolio is called flexibility.
True False
6. The process when a company seeks to match the benefits of a successful position while
maintaining its existing position by adding new features, services, and technologies into its
current portfolio it is called straddling.
True False
2-1
Full file at
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7. By following a straddling strategy, firms can broaden their capabilities and effectively
compete with more focused firms in markets requiring low cost for success.
True False
8. An order winner is a set of criteria that differentiates the products or services of one firm
from another.
True False
9. An order winner is a set of screening criteria that permits a firm's products to be considered
as possible candidates for purchase.
True False
10. An order qualifier is a set of screening criteria that permits a firm's products to be
considered as possible candidates for purchase.
True False
11. Activity-system maps show how a company's strategy is delivered through a set of tailored
activities.
True False
12. Activity-system maps are useful in understanding how well a system of activities fits the
overall company's strategy.
True False
13. Activity-system maps depict the geographic reach of a company's business strategies.
True False
2-2
Full file at
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14. Operations and supply chain strategy are not important issues to investors who tend to focus
on growth, dividends and earnings per share.
True False
15. Investors pay close attention to efficiency and productivity measures like net income per
employee because they are interested in how well the firm manages its workforce relations.
True False
16. During a recession, efficient firms often have an opportunity to increase market share while
maintaining profitability.
True False
17. An operations strategy must resist change because of the long term nature of equipment and
personnel investments.
True False
18. Operations and supply strategy can be viewed as part of a planning process that coordinates
operational goals with those of the larger organization.
True False
19. Infrastructure decisions within operations strategy include the selection of the appropriate
technology, the role of inventory and the location of facilities.
True False
20. Infrastructure decisions within operations strategy include the selection of the logic
associated with the planning and control systems.
True False
2-3
Full file at
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21. Once an operations strategy is adopted and articulated, the primary emphasis becomes
perfecting the system of activities that make up the strategy through detailed refinements over a
long period of time.
True False
22. The job of operations and supply chain strategy is to deliver the most feature-rich, highest
quality product at the lowest price within specified parameters of delivery time and
customization.
True False
23. Wall Street analysts are not particularly concerned with how efficient companies are from
an operations and supply management view.
True False
24. Productivity is a relative measure.
True False
25. In a partial measure of productivity the denominator of the ratio would include all resources
used or all inputs.
True False
26. In a multifactor measure of productivity the numerator of the ratio would include all
resources used or all inputs.
True False
27. The operations and supply activities of the firm need to strategically support the
competitive priorities of the firm.
True False
2-4
Full file at
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28. The triple bottom line considers evaluating the firm against social, economic, and
environmental criteria.
True False
29. Sustainability means meeting a firm's current needs without excessively compromising the
ability of future generations to meet their own needs.
True False
30. The social impact of the triple bottom line concept pertains to fair and beneficial business
practices toward labor, the community, and the region in which a firm conducts its business.
True False
31. A firm's business practices toward its labor force pertain mainly to the economic aspect of
the triple bottom line concept.
True False
32. According to the economic aspect of the triple bottom line concept the firm is obligated to
compensate stakeholders by earning a competitive return on investment.
True False
33. Within a sustainability framework, the economic dimension of the triple bottom line
concept goes beyond just profit for the firm but also provides lasting economic benefit to
society.
True False
34. Within a sustainability framework, the environmental dimension of the triple bottom line
concept has to do with labor, the community, and the region in which a firm conducts its
business.
True False
2-5
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Multiple Choice Questions
35. Which of the following is not a major strategic operational competitive dimension that
forms a company's competitive position?
A. Cost or price
B. Delivery speed
C. Delivery reliability
D. Management acumen
E. Coping with changes in demand
36. A major competitive dimension that forms a company's strategic operational competitive
position in their strategic planning is which of the following?
A. Cost or price
B. Focus
C. Automation
D. Straddling
E. Activity-system mapping
37. When developing an operations and supply chain strategy, which of the following is an
important product-specific criterion to consider?
A. Technical liaison
B. Learning curve
C. Competitor's product performance
D. Production lot-size
E. Total quality management
38. In development of a operations and supply chain strategy, which of the following may be an
important product-specific criteria to consider?
A. Focus
B. Production lot-size
C. Supplier after-sale support
D. Learning curve
E. Total quality management
2-6
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39. When a company seeks to match the benefits of a successful position while maintaining its
existing position in offering customers a variety of differing services, what is this process
called?
A. Operations capability analysis
B. Straddling
C. Order qualifying
D. Order winning
E. Inter-functional analysis
40. An activity-system map is which of the following?
A. A network guide to route airlines
B. A listing of activities that make up a project
C. A diagram that shows how a company's strategy is delivered to customers
D. A facility layout schematic noting what is done where
E. A timeline displaying major planned events
41. Which of the following is not a measure of operations and supply chain management
efficiency used by Wall Street?
A. Inventory turnover
B. Revenue per employee
C. Receivable turnover
D. Earnings per share
E. Asset turnover
42. Which of the following is a measure of operations and supply management efficiency used
by Wall Street?
A. Dividend payout ratio
B. Current ratio
C. Receivable turnover
D. Earnings per share growth
E. Financial leverage
2-7
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43. Which of the following is a partial measure of productivity?
A. Output/Materials
B. Output/(Labor + Capital + Energy)
C. Output/All resources used
D. Output/Inputs
E. All of the above
44. Which of the following is a multifactor measure of productivity?
A. Output/(Materials)
B. Output/(Labor + Capital + Energy)
C. Output/All resources used
D. Output/Inputs
E. All of the above
45. Which of the following is a total measure of productivity?
A. Output/Materials
B. Output/(Labor + Capital + Energy)
C. Output/Labor
D. Output/Inputs
E. All of the above
46. If all you knew about a production system was that total daily output was 400 units and the
total labor necessary to produce the 400 units was 350 hours, what kind of productivity measure
could you use to compute productivity?
A. Partial measure
B. Multifactor measure
C. Total measure
D. Global measure
E. All of the above
2-8
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47. If all you knew about a production system was that total daily output was 400 units and the
total labor necessary to produce the 400 units was 350 hours, and the total materials used were
425 units, what kind of productivity measure could you use to compute productivity?
A. Partial measure
B. Multifactor measure
C. Total measure
D. A and B above
E. B and C above
48. The total output from a production system in one day is 500 units and the total labor
necessary to produce the 500 units is 350 hours. Using the appropriate productivity measure,
which of the following numbers represents the resulting productivity ratio?
A. 1.000
B. 1.428
C. 0.700
D. 0.411
E. None of the above
49. The total output from a production system in one day is 900 units and the total labor
necessary to produce the 900 units is 900 hours. Using the appropriate productivity measure,
what is the resulting productivity ratio?
A. 1.000
B. 1.428
C. 0.700
D. 0.411
E. None of the above
2-9
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50. Larry's Auto Body Repair Shop had revenues that averaged $60,000 per week in April and
$50,000 per week in May. During both months, the shop employed six full-time (40
hours/week) workers. In April the firm also had four part-time workers working 25 hours per
week but in May there were only 2 part-time workers and they only worked 10 hours per week.
What is the percentage change in labor productivity from April to May for Larry's Auto Body
Repair?
A. - 20.00%
B. - 15.82%
C. 8.95%
D. 2.3%
E. - 25.00%
51. Various financial data for SunPath Manufacturing for 2011 & 2012 follow.
What is the percentage change in SunPath's total productivity measure between 2011 & 2012?
A. - 9.22
B. 2.33
C. - 0.53
D. 2.88
E. 10.39
2-10
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52. Various financial data for SunPath Manufacturing for 2011 & 2012 follow.
What is the percentage change in the energy partial productivity measure for SunPath between
2011 & 2012?
A. - 9.22%
B. 2.33%
C. - 0.53%
D. 2.88%
E. 22.2%
53. Various financial data for SunPath Manufacturing for 2011 & 2012 follow.
What is the percentage change in the labor partial productivity measure for SunPath between
2011 & 2012?
A. - 9.22
B. 2.33
C. - 0.53
D. 2.88
E. 10.39
2-11
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54. Various financial data for SunPath Manufacturing for 2011 & 2012 follow.
What is the percentage change in the multifactor labor and raw materials productivity measure
for SunPath between 2011 & 2012?
A. - 9.22
B. 2.33
C. - 0.53
D. - 2.88
E. 10.39
Fill in the Blank Questions
55. What is a criterion or product characteristic that differentiates a product from the products
of competitors in a way meaningful to the market called? ____________________
________________________________________
56. A diagram showing how a company's strategy is delivered through a set of tailored
activities is called what? _____________________
________________________________________
57. The triple-bottom-line evaluates the firm against what three criteria?
1. _____________________
2. _____________________
3. _____________________
________________________________________
2-12
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58. People who provide capital to the firm through stock purchases are called:
_____________________
________________________________________
59. Individuals or organizations that are influenced, either directly or indirectly, by the actions
of the firm are called: _____________________
________________________________________
60. Name five common measures of operations and supply management efficiency used by
Wall Street.
1. _____________________
2. _____________________
3. _____________________
4. _____________________
5. _____________________
________________________________________
Essay Questions
61. Describe a specific example of the trade-offs between any two of the competitive
dimensions.
2-13
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62. Explain the role that "order qualifiers" and "order winners" play as the interface between
marketing and operations.
2-14
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Chapter 02 Strategy and Sustainability Answer Key
True / False Questions
1. (p. 23) An operations and supply chain strategy must be integrated with the organization's
corporate strategy.
TRUE
Operations and supply chain strategy is concerned with setting broad policies and plans for
using the resources of a firm and must be integrated with corporate strategy.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: What is Operations and Supply Chain Strategy?
2. (p. 25) One of the competitive dimensions that form the competitive position of a company
when planning their strategies is cost.
TRUE
The major competitive dimensions that form the competitive position of a firm include cost.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: What is Operations and Supply Chain Strategy?
2-15
Full file at
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3. (p. 25) One of the competitive dimensions that form the competitive position of a company
when planning their strategies is delivery speed.
TRUE
The major competitive dimensions that form the competitive position of a firm include delivery
speed.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: What is Operations and Supply Chain Strategy?
4. (p. 25) One of the competitive dimensions that form the competitive position of a company
when planning their strategies is making the best trade-off.
FALSE
The major competitive dimensions that form the competitive position of a firm does not include
making the best trade-off.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: What is Operations and Supply Chain Strategy?
5. (p. 27) The process when a company seeks to match the benefits of a successful position while
maintaining its existing position by adding new features, services, and technologies into its
current portfolio is called flexibility.
FALSE
Straddling occurs when a company seeks to match the benefits of a successful position while
maintaining its existing position.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: What is Operations and Supply Chain Strategy?
2-16
Full file at
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6. (p. 27) The process when a company seeks to match the benefits of a successful position while
maintaining its existing position by adding new features, services, and technologies into its
current portfolio it is called straddling.
TRUE
Straddling occurs when a company seeks to match the benefits of a successful position while
maintaining its existing position.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: What is Operations and Supply Chain Strategy?
7. (p. 27) By following a straddling strategy, firms can broaden their capabilities and effectively
compete with more focused firms in markets requiring low cost for success.
FALSE
Straddling is a risky strategy that often results in failure. More focused firms can effectively
compete with a straddling firm in each segment the straddling firm enters.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: What is Operations and Supply Chain Strategy?
8. (p. 27) An order winner is a set of criteria that differentiates the products or services of one firm
from another.
TRUE
An order winner is a criterion that differentiates the products or services of one firm from those
of another.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-03 Identify order winners and order qualifiers
Topic Area: What is Operations and Supply Chain Strategy?
2-17
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9. (p. 27) An order winner is a set of screening criteria that permits a firm's products to be
considered as possible candidates for purchase.
FALSE
An order qualifier is a screening criterion that permits a firm's products to even be considered as
possible candidates for purchase.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-03 Identify order winners and order qualifiers
Topic Area: What is Operations and Supply Chain Strategy?
10. (p. 27) An order qualifier is a set of screening criteria that permits a firm's products to be
considered as possible candidates for purchase.
TRUE
An order qualifier is a screening criterion that permits a firm's products to even be considered as
possible candidates for purchase.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-03 Identify order winners and order qualifiers
Topic Area: What is Operations and Supply Chain Strategy?
11. (p. 27) Activity-system maps show how a company's strategy is delivered through a set of
tailored activities.
TRUE
Activity-system maps show how a company's strategy is delivered through a set of tailored
activities.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: Strategic Fit: Fitting Operational Activities to Strategy
2-18
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12. (p. 28) Activity-system maps are useful in understanding how well a system of activities fits
the overall company's strategy.
TRUE
(Activity system) map(s) can be useful in understanding how good the fit is between the system
of activities and the company's strategy.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: Strategic Fit: Fitting Operational Activities to Strategy
13. Activity-system maps depict the geographic reach of a company's business strategies.
FALSE
Activity system maps are conceptual have nothing to do with the physical geographic reach of a
company.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: Strategic Fit: Fitting Operational Activities to Strategy
14. (p. 32) Operations and supply chain strategy are not important issues to investors who tend to
focus on growth, dividends and earnings per share.
FALSE
Comparing firms from an operations view is important to investors since the relative cost of
providing a good or service is essential to high earnings growth.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-06 Explain how the financial markets evaluate a firm's operations and supply chain performance
Topic Area: How Does Wall Street Evaluate Operations Performance?
2-19
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15. (p. 32) Investors pay close attention to efficiency and productivity measures like net income
per employee because they are interested in how well the firm manages its workforce relations.
FALSE
Investors are most often interested in financial returns. Efficiency and productivity are
important because they are harbingers of sustainable profitability and growth. How well a firm
manages its' workforce is of less interest to investors.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-06 Explain how the financial markets evaluate a firm's operations and supply chain performance
Topic Area: How Does Wall Street Evaluate Operations Performance?
16. (p. 32) During a recession, efficient firms often have an opportunity to increase market share
while maintaining profitability.
TRUE
Highly efficient firms usually shine when demand drops during recession periods since they
often can continue to make a profit due to their low-cost structure. These operations-savvy
firms may even see a recession as an opportunity to gain market share as their less-efficient
competitors struggle to remain in business.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: How Does Wall Street Evaluate Operations Performance?
2-20
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17. (p. 23) An operations strategy must resist change because of the long term nature of
equipment and personnel investments.
FALSE
Since the goals of the larger organization change over time, the operations strategy must be
designed to anticipate future needs.
AACSB: Analytic
Bloom's Taxonomy: Understand
Difficulty: Easy
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: What is Operations and Supply Chain Strategy?
18. (p. 23) Operations and supply strategy can be viewed as part of a planning process that
coordinates operational goals with those of the larger organization.
TRUE
Operations and supply chain strategy can be viewed as part of a planning process that
coordinates operational goals with those of the larger organization.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: What is Operations and Supply Chain Strategy?
19. (p. 25) Infrastructure decisions within operations strategy include the selection of the
appropriate technology, the role of inventory and the location of facilities.
FALSE
Process design includes selecting the appropriate technology, sizing the process over time,
determining the role of inventory in the process, and locating the process.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: What is Operations and Supply Chain Strategy?
2-21
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20. (p. 25) Infrastructure decisions within operations strategy include the selection of the logic
associated with the planning and control systems.
TRUE
The infrastructure decisions involve the logic associated with the planning and control systems,
quality assurance and control approaches, work payment structure, and organization of the
operations and supply chain functions.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: What is Operations and Supply Chain Strategy?
21. (p. 24) Once an operations strategy is adopted and articulated, the primary emphasis becomes
perfecting the system of activities that make up the strategy through detailed refinements over a
long period of time.
FALSE
See the discussion around exhibit 2.2. Operations strategy is continually revised, re-planned &
coordinated with the ever-changing corporate strategy.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: What is Operations and Supply Chain Strategy?
22. (p. 23) The job of operations and supply chain strategy is to deliver the most feature-rich,
highest quality product at the lowest price within specified parameters of delivery time and
customization.
FALSE
Operations and supply chain strategy is concerned with setting broad policies and plans for
using the resources of a firm and must be integrated with corporate strategy.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: What is Operations and Supply Chain Strategy?
2-22
Full file at
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23. (p. 32) Wall Street analysts are not particularly concerned with how efficient companies are
from an operations and supply management view.
FALSE
Comparing firms from an operations view is important to investors since the relative cost of
providing a good or service is essential to high earnings growth.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-06 Explain how the financial markets evaluate a firm's operations and supply chain performance
Topic Area: How Does Wall Street Evaluate Operations Performance?
24. (p. 31) Productivity is a relative measure.
TRUE
Productivity is what we call a relative measure. In other words, to be meaningful, it needs to be
compared with something else.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
25. (p. 31) In a partial measure of productivity the denominator of the ratio would include all
resources used or all inputs.
FALSE
In a partial measure of productivity the denominator includes only a single input.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
2-23
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26. (p. 31) In a multifactor measure of productivity the numerator of the ratio would include all
resources used or all inputs.
FALSE
In a multi-factor measure of productivity the denominator includes a group of inputs.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
27. (p. 33) The operations and supply activities of the firm need to strategically support the
competitive priorities of the firm.
TRUE
The operations and supply activities of the firm need to strategically support the competitive
priorities of the firm.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: Summary
28. (p. 22) The triple bottom line considers evaluating the firm against social, economic, and
environmental criteria.
TRUE
The triple bottom line considers evaluating the firm against social, economic, and
environmental criteria.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: A Sustainable Strategy
2-24
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29. (p. 22) Sustainability means meeting a firm's current needs without excessively
compromising the ability of future generations to meet their own needs.
FALSE
By adding "sustainability" to the concept (of strategy), we add the requirement to meet these
current needs without compromising the ability of future generations to meet their own needs.
(Excessively is not mentioned.)
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: A Sustainable Strategy
30. (p. 22) The social impact of the triple bottom line concept pertains to fair and beneficial
business practices toward labor, the community, and the region in which a firm conducts its
business.
TRUE
"Social" pertains to fair and beneficial business practices toward labor, the community, and the
region in which a firm conducts its business.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: A Sustainable Strategy
31. (p. 22) A firm's business practices toward its labor force pertain mainly to the economic aspect
of the triple bottom line concept.
FALSE
"Social" pertains to fair and beneficial business practices toward labor, the community, and the
region in which a firm conducts its business.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: A Sustainable Strategy
2-25
Full file at
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32. (p. 23) According to the economic aspect of the triple bottom line concept the firm is
obligated to compensate stakeholders by earning a competitive return on investment.
FALSE
The firm is obligated to compensate shareholders who provide capital through stock purchases
and other financial instruments via a competitive return on investment.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: A Sustainable Strategy
33. (p. 23) Within a sustainability framework, the economic dimension of the triple bottom line
concept goes beyond just profit for the firm but also provides lasting economic benefit to
society.
TRUE
Within a sustainability framework, this (economic) dimension goes beyond just profit for the
firm but also provides lasting economic benefit to society.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: A Sustainable Strategy
34. (p. 22) Within a sustainability framework, the environmental dimension of the triple bottom
line concept has to do with labor, the community, and the region in which a firm conducts its
business.
FALSE
"Social" pertains to fair and beneficial business practices toward labor, the community, and the
region in which a firm conducts its business.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: A Sustainable Strategy
2-26
Full file at
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Multiple Choice Questions
35. (p. 25-27) Which of the following is not a major strategic operational competitive dimension
that forms a company's competitive position?
A. Cost or price
B. Delivery speed
C. Delivery reliability
D. Management acumen
E. Coping with changes in demand
The operational competitive dimensions that form a company's competitive position are listed
on pages 25-27. Management acumen is not mentioned.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: What is Operations and Supply Chain Strategy?
36. (p. 25) A major competitive dimension that forms a company's strategic operational
competitive position in their strategic planning is which of the following?
A. Cost or price
B. Focus
C. Automation
D. Straddling
E. Activity-system mapping
Cost or Price is one of the competitive dimensions mentioned in the text.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: What is Operations and Supply Chain Strategy?
2-27
Full file at
http://testbankwizard.eu/Test-Bank-for-Operations-and-Supply-Chain-Management-13th-Edition-by-Jacobs
37. (p. 26) When developing an operations and supply chain strategy, which of the following is an
important product-specific criterion to consider?
A. Technical liaison
B. Learning curve
C. Competitor's product performance
D. Production lot-size
E. Total quality management
Technical liaison and support. A supplier may be expected to provide technical assistance for
product development, particularly during the early stages of design and manufacturing.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: What is Operations and Supply Chain Strategy?
38. (p. 26) In development of a operations and supply chain strategy, which of the following may
be an important product-specific criteria to consider?
A. Focus
B. Production lot-size
C. Supplier after-sale support
D. Learning curve
E. Total quality management
An important competitive dimension may be the ability of a firm to support its product after the
sale.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: What is Operations and Supply Chain Strategy?
2-28
Full file at
http://testbankwizard.eu/Test-Bank-for-Operations-and-Supply-Chain-Management-13th-Edition-by-Jacobs
39. (p. 27) When a company seeks to match the benefits of a successful position while
maintaining its existing position in offering customers a variety of differing services, what is
this process called?
A. Operations capability analysis
B. Straddling
C. Order qualifying
D. Order winning
E. Inter-functional analysis
Straddling occurs when a company seeks to match the benefits of a successful position while
maintaining its existing position.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: What is Operations and Supply Chain Strategy?
40. (p. 28-29) An activity-system map is which of the following?
A. A network guide to route airlines
B. A listing of activities that make up a project
C. A diagram that shows how a company's strategy is delivered to customers
D. A facility layout schematic noting what is done where
E. A timeline displaying major planned events
Activity-system maps such as the one for IKEA show how a company's strategy is delivered
through a set of tailored activities.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Learning Objective: 02-04 Understand the concept of strategic fit
Topic Area: Strategic Fit: Fitting Operational Activities to Strategy
2-29
Full file at
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41. (p. 32-33) Which of the following is not a measure of operations and supply chain management
efficiency used by Wall Street?
A. Inventory turnover
B. Revenue per employee
C. Receivable turnover
D. Earnings per share
E. Asset turnover
Earnings per Share is not a measure of operations and supply chain efficiency.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-06 Explain how the financial markets evaluate a firm's operations and supply chain performance
Topic Area: How Does Wall Street Evaluate Operations Performance?
42. (p. 33) Which of the following is a measure of operations and supply management efficiency
used by Wall Street?
A. Dividend payout ratio
B. Current ratio
C. Receivable turnover
D. Earnings per share growth
E. Financial leverage
Receivables turnover, the correct answer, is listed in exhibit 2.7 "Efficiency Measures Used by
Wall Street".
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-06 Explain how the financial markets evaluate a firm's operations and supply chain performance
Topic Area: How Does Wall Street Evaluate Operations Performance?
2-30
Full file at
http://testbankwizard.eu/Test-Bank-for-Operations-and-Supply-Chain-Management-13th-Edition-by-Jacobs
43. (p. 31) Which of the following is a partial measure of productivity?
A. Output/Materials
B. Output/(Labor + Capital + Energy)
C. Output/All resources used
D. Output/Inputs
E. All of the above
Answer A is correct. Answer B is a multifactor measure of productivity while C & D are
measures of total productivity.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
44. (p. 31) Which of the following is a multifactor measure of productivity?
A. Output/(Materials)
B. Output/(Labor + Capital + Energy)
C. Output/All resources used
D. Output/Inputs
E. All of the above
Answer B is correct. Answer A is a partial measure of productivity while C & D are measures of
total productivity.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
2-31
Full file at
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45. (p. 31) Which of the following is a total measure of productivity?
A. Output/Materials
B. Output/(Labor + Capital + Energy)
C. Output/Labor
D. Output/Inputs
E. All of the above
Answer D is correct. Answer A is a partial measure of productivity, Answer B is a multifactor
measure of productivity while C is a measure of total productivity.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
46. (p. 31) If all you knew about a production system was that total daily output was 400 units and
the total labor necessary to produce the 400 units was 350 hours, what kind of productivity
measure could you use to compute productivity?
A. Partial measure
B. Multifactor measure
C. Total measure
D. Global measure
E. All of the above
Answer A is correct. Without measures of other inputs only a partial output measure is possible.
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Easy
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
2-32
Full file at
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47. (p. 31) If all you knew about a production system was that total daily output was 400 units and
the total labor necessary to produce the 400 units was 350 hours, and the total materials used
were 425 units, what kind of productivity measure could you use to compute productivity?
A. Partial measure
B. Multifactor measure
C. Total measure
D. A and B above
E. B and C above
Answer D is the most correct of the answers. You could use either a partial or a multifactor
measure or both kinds of measure.
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Easy
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
48. The total output from a production system in one day is 500 units and the total labor
necessary to produce the 500 units is 350 hours. Using the appropriate productivity measure,
which of the following numbers represents the resulting productivity ratio?
A. 1.000
B. 1.428
C. 0.700
D. 0.411
E. None of the above
See exhibit 2.5 on page 31, 500 units divided by 350 hours = 1.428.
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Medium
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
2-33
Full file at
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49. The total output from a production system in one day is 900 units and the total labor
necessary to produce the 900 units is 900 hours. Using the appropriate productivity measure,
what is the resulting productivity ratio?
A. 1.000
B. 1.428
C. 0.700
D. 0.411
E. None of the above
Answer A is 900 units divided by 900 hours equals 1.0 units per hour.
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Medium
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
50. Larry's Auto Body Repair Shop had revenues that averaged $60,000 per week in April and
$50,000 per week in May. During both months, the shop employed six full-time (40
hours/week) workers. In April the firm also had four part-time workers working 25 hours per
week but in May there were only 2 part-time workers and they only worked 10 hours per week.
What is the percentage change in labor productivity from April to May for Larry's Auto Body
Repair?
A. - 20.00%
B. - 15.82%
C. 8.95%
D. 2.3%
E. - 25.00%
Labor productivity is output (revenue) divided by hours of labor input. For April, revenue was
$60,000 and labor hours were 4  [(40  6) + (25  4)]. This is 60,000/1,360 or 44.12 dollars per
hour of labor. For May, revenue was $50,000 and labor hours were 4  [(40  6) + (10  2)] This
is 50,000/1,040 or 48.07 dollars per hour of labor a difference of $3.95 per hour. The percentage
change in productivity between April and May, then, is 3.95/44.12 = 0.0895  100 = 8.95%.
(Note: this analysis assumes four weeks in each month and equal productivity for each hour
worked.)
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Hard
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
2-34
Full file at
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51. Various financial data for SunPath Manufacturing for 2011 & 2012 follow.
What is the percentage change in SunPath's total productivity measure between 2011 & 2012?
A. - 9.22
B. 2.33
C. - 0.53
D. 2.88
E. 10.39
Total productivity for 2011 is $300,000 divided by the sum $40,000 + $45,000 + $10,000 +
$250,000 + $2,000 or 0.8646. Total productivity for 2012 is $330,000 divided by the sum of
$43,000 + $51,000 + $9,000 + 262,000 + $6,000 or 0.8895. The difference between 2011 and
2012 is 0.0249 and the percentage difference is 0.0249 divided by 0.8646 = 0.0288 or 2.88%.
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Hard
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
2-35
Full file at
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52. Various financial data for SunPath Manufacturing for 2011 & 2012 follow.
What is the percentage change in the energy partial productivity measure for SunPath between
2011 & 2012?
A. - 9.22%
B. 2.33%
C. - 0.53%
D. 2.88%
E. 22.2%
The energy partial productivity measure for 2011 is $300,000 divided by $10,000 or 30. For
2012 it is $330,000 divided by $9,000 or 36.66. The percentage change between 2011 and 2012
then is (36.66 - 30)/30 or 6.66 divided by 30 = 22.2%.
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Medium
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
2-36
Full file at
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53. Various financial data for SunPath Manufacturing for 2011 & 2012 follow.
What is the percentage change in the labor partial productivity measure for SunPath between
2011 & 2012?
A. - 9.22
B. 2.33
C. - 0.53
D. 2.88
E. 10.39
The labor partial productivity measure for 2011 is $300,000 divided by $40,000 or 7.5. For
2012 it is $330,000 divided by $43,000 or 7.67. The percentage change between 2011 and
2012, then is (7.67 - 7.5)/7.5 or 0.17 divided by 7.5 = 2.33%.
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Medium
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
2-37
Full file at
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54. Various financial data for SunPath Manufacturing for 2011 & 2012 follow.
What is the percentage change in the multifactor labor and raw materials productivity measure
for SunPath between 2011 & 2012?
A. - 9.22
B. 2.33
C. - 0.53
D. - 2.88
E. 10.39
The multifactor labor and raw materials productivity measure for 2011 is $300,000 divided by
the sum $40,000 + $45,000 or 3.53. For 2012 it is $330,000 divided by the sum $51,000 +
$43,000 or 3.51. The percentage change between 2011 and 2012, then is (3.511 - 3.529)/3.529
or - 0.018 divided by 3.529 = - 0.53%.
AACSB: Analytic
Bloom's Taxonomy: Analyze
Difficulty: Hard
Learning Objective: 02-05 Describe how productivity is measured and how it relates to operations and supply chain processes
Topic Area: Productivity Measurement
Fill in the Blank Questions
2-38
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55. (p. 27) What is a criterion or product characteristic that differentiates a product from the
products of competitors in a way meaningful to the market called? ____________________
Order winner
An order winner is a criterion that differentiates the products or services of one firm from those
of another.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-03 Identify order winners and order qualifiers
Topic Area: What is Operations and Supply Chain Strategy?
2-39
Full file at
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56. (p. 28) A diagram showing how a company's strategy is delivered through a set of tailored
activities is called what? _____________________
Activity-system map
Activity-system maps such as the one for IKEA show how a company's strategy is delivered
through a set of tailored activities.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-01 Compare how operations and supply chain strategy relates to marketing and finance
Topic Area: Strategic Fit: Fitting Operational Activities to Strategy
57. (p. 22) The triple-bottom-line evaluates the firm against what three criteria?
1. _____________________
2. _____________________
3. _____________________
The text provides three alternatives: social, economic, and environmental; people, planet,
and profit; or folk, work, and place.
The triple bottom line, Exhibit 2.1, considers evaluating the firm against social, economic, and
environmental criteria. Many companies have developed this expanded view through goals that
relate to sustainability along each of these dimensions. Some alternative phrases for the same
concept are "People, Planet, and Profit" used by Shell Oil Company, and "Folk, Work, and
Place" which originated with the 20th-century writer Patrick Geddes.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: A Sustainable Strategy
2-40
Full file at
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58. (p. 23) People who provide capital to the firm through stock purchases are called:
_____________________
Shareholders
Shareholders provide capital through stock purchases & (Page 22) Shareholders are those
individuals or companies that legally own one or more shares of stock in the company.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-06 Explain how the financial markets evaluate a firm's operations and supply chain performance
Topic Area: A Sustainable Strategy
59. (p. 22) Individuals or organizations that are influenced, either directly or indirectly, by the
actions of the firm are called: _____________________
Stakeholders
Stakeholders are those individuals or organizations who are influenced, either directly or
indirectly, by the actions of the firm.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Easy
Learning Objective: 02-06 Explain how the financial markets evaluate a firm's operations and supply chain performance
Topic Area: A Sustainable Strategy
2-41
Full file at
http://testbankwizard.eu/Test-Bank-for-Operations-and-Supply-Chain-Management-13th-Edition-by-Jacobs
60. Name five common measures of operations and supply management efficiency used by
Wall Street.
1. _____________________
2. _____________________
3. _____________________
4. _____________________
5. _____________________
The five common measures of operations and supply management efficiency used by
Wall Street are Income per employee; Revenue per employee; Inventory turnover; Asset
turnover; Receivable turnover.
See Exhibit 2.7 on Page 33. Income per employee; Revenue per employee; Inventory turnover;
Asset turnover; Receivable turnover.
AACSB: Analytic
Bloom's Taxonomy: Remember
Difficulty: Medium
Learning Objective: 02-06 Explain how the financial markets evaluate a firm's operations and supply chain performance
Topic Area: How Does Wall Street Evaluate Operations Performance?
Essay Questions
61. Describe a specific example of the trade-offs between any two of the competitive
dimensions.
This question requires that the student recall at least two of the seven competitive dimensions
described under the heading "Competitive Dimensions" on pages 25-27 of the text. In
evaluating the student's response the instructor should take care that the student's arguments do,
indeed illustrate a "trade-off" or a situation where an improvement in one dimension comes at
the cost of a lessening of a different dimension. A fairly common example is between achieving
low cost (or price) at the expense of quality. For this example it is necessary for the student to
specify that he is talking about reducing design quality to achieve low cost (for example)
instead of process quality where improvements typically result in lowered cost.
AACSB: Analytic
Bloom's Taxonomy: Create
Difficulty: Medium
Learning Objective: 02-02 Understand the competitive dimensions of operations and supply chain strategy
Topic Area: Strategic Fit: Fitting Operational Activities to Strategy
2-42
Full file at
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62. Explain the role that "order qualifiers" and "order winners" play as the interface between
marketing and operations.
The student's answer to this question should indicate the usefulness of articulating and
differentiating between order winners and order qualifiers. In essence, these factors should
indicate the essence of what is required to compete in the marketplace and the ways that the
product or service, itself, differentiates itself from competing products and services. This topic
is discussed in the text on pages 27-28 under the heading "Order Winners and Qualifiers: The
Marketing-Operations Link."
AACSB: Analytic
Bloom's Taxonomy: Create
Difficulty: Medium
Learning Objective: 02-03 Identify order winners and order qualifiers
Topic Area: What is Operations and Supply Chain Strategy?
2-43